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NY K84593




March 30, 2004

CLA-2-21:RR:NC:2:228 K84593

CATEGORY: CLASSIFICATION

TARIFF NO.: 2106.90.1200

Mr. David Doyle
Hiram Walker & Sons Limited
Box 2518
Windsor, Ontario N8Y 4S5 Canada

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of a liqueur concentrate from Canada, and the country of origin marking of a coffee liqueur made in the United States with the imported liqueur concentrate; Article 509

Dear Mr. Doyle:

In your letter dated March 23, 2004 you requested a ruling on the status of a liqueur concentrate from Canada and a coffee liqueur made in the United States, under the NAFTA.

The imported product, “Coffee Liqueur Concentrate CAN” is described as a liquid concentrate which, by addition of water and/or additional liqueur concentrate, will create a coffee liqueur beverage. Coffee Liqueur Concentrate CAN is composed of a concentrate produced in Mexico, “Coffee Liqueur Concentrate MEX”, to which sugar and Canadian wine have been added. The MEX ingredient is composed of sugar, cane spirit, coffee extracts, and methyl and ethyl vanillin, all of which are products of Mexico. The MEX ingredient contains between 25 and 52 percent alcohol. After importation into Canada, the MEX concentrate will be mixed with a neutral grape white wine of Canadian origin and a sugar additive (invert sugar, liquid sugar, high fructose corn syrup, or fructose water solution) that may be a good of the United States, Canada, or an unspecified, non-NAFTA country. The resulting Coffee Liqueur Concentrate CAN, containing 16-17.5 percent alcohol by weight, will then be exported to the United States for final blending and bottling.

In the United States, the CAN product will either be diluted with water, filtered and bottled, or diluted with additional MEX concentrate, water and sugar, filtered and bottled.

The applicable tariff provision for the Coffee Liqueur Concentrate CAN will be 2106.90.1200, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for food preparations not elsewhere specified or included...other...compound alcoholic preparations of an alcoholic strength by volume exceeding 0.5 percent vol. of a kind used for the manufacture of beveragescontaining not over 20 percent of alcohol by weight. The general rate of duty will be 4.2 cents per kilogram plus 1.9 percent ad valorem. In addition, this product may be subject to Federal Excise Tax (26 U.S.C. 5001 or 26 U.S.C. 5041).

General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein

Based on the facts provided, the Coffee Liqueur Concentrate CAN described above qualifies for NAFTA preferential treatment. When made using sugar of United States or Canada origin, it will meet the requirements of HTSUSA General Note 12(b)(i), and when made using sugar of a non-NAFTA country it will meet the requirements of HTSUSA General Notes 12(b)(ii)(A) and 12(t)/21.13. The Coffee Liqueur Concentrate CAN will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.

Section 134.1(b) of the regulations, defines "country of origin" as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.

Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the finished coffee liqueur beverage, bottled in the United States, is a good of Mexico for marking purposes.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Stanley Hopard at 646-733-3029.

Sincerely,

Robert B. Swierupski
Director,

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